“The majority of revenues received in excess of our projections are due to higher than expected Treasury investment returns,” Budget Director Josh Swedberg told supervisors at their meeting on Tuesday. He said the county earned the interest from “higher-rate securities,” an amount he called “abnormal” compared to years past. “This is reflective of the high interest-rate market we have experienced as part of the pandemic recovery,” he said.
The Federal Reserve has kept interest rates relatively high as a means of cooling inflation, which spiked to 8% in 2022. In addition to pandemic-induced kinks in supply chains, two trillion-dollar spending bills passed during the Biden administration have been cited as probable causes of the rise in inflation.
Marin County benefited at both ends of the equation, since it received a $50 million share of the $1.9 trillion American Rescue Plan Act economic stimulus bill.
On Tuesday, Swedberg presented county supervisors with a seven-part plan for spending $20.4 million of the unexpected bonanza.
The county executive’s office recommended spending $10 million on a plan to build new headquarters for the Marin County Fire Department in San Geronimo Valley. County officials have formed a committee to coordinate the project and will update supervisors at their Dec. 17 meeting, Swedberg said.
The county executive’s office also recommended spending $1.25 million to increase funding for the county’s retiree health care liabilities. As of July 1, 2023, the county had a funded ratio of 58%.
The county budget for fiscal year 2023-24, which supervisors approved in June, already contributes $13 million to retiree health care liabilities.
Other recommendations included spending an additional $1.25 million on capital investment in facilities and roads, and $900,000 on an effort to reopen the Civic Center’s cafeteria, which has been closed since 2018.